Infosys buys Israel's Panaya for $230m

This is Indian IT giant Infosys's first acquisition in Israel. It plans to turn Panaya into its Israeli development center.

After several crises, and after it was on the verge of closure, Israeli company Panaya is being sold to Indian IT giant Infosys (INFY) for $230 million. Panaya provides automation technology for large scale enterprise software management. The deal values the Israeli company at $200 million, plus its remaining cash of $30 million.

As far as the investors in Panaya are concerned, this is a good deal, since the company was in a severe state of crisis and had laid off employees, and now they are receiving a decent return on their money. The list of investors includes the Benchmark Cpital and Battery Ventures venture capital firms, alongside Hasso Plattner Ventures. Hasso Plattner was among the founders of SAP. Haim Shani and Moshe Lichtman's Israel Growth Ventures came into the company at the last minute before the exit, investing $20 million in January this year. Altogether, Panaya raised $59 million.

Panaya was founded in 2006 by Yossi Cohen, who served as CEO for a long period until he was replaced by Doron Gerstel, who was brought in to try to save the company. At first, Panaya's activity was in SAP and Oracle systems, but it has recently entered the world of mobile applications as well. It was seleceted by "Globes" as one of Israel's most promising start-ups in 2010.

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Infosys is traded on the New York Stock Exchange at a market cap of $42 billion. This is its first acquisition in Israel. It plans to turn Panaya's offices in Ra'anana, where 160 people are employed, into its first Israeli development center. Three years ago, Infosys signed an R&D cooperation agreement with the Chief Scientist in Israel's Ministry of the Economy, following a visit to Israel by a delegation of senior managers from the company.

Infosys CEo and managing director Dr. Vishal Sikka said, "The acquisition of Panaya is a key step in renewing and differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients. At the same time, Panaya's proven technology helps dramatically simplify the costs and complexities faced by businesses in managing their enterprise application landscapes."